British business confidence has deteriorated as the war in Iran exacerbates employers’ concerns about costs, according to a survey of accountants which echoes similar fears of other organizations since the start of the Israeli-US strikes.
The Institute of Chartered Accountants in England and Wales (ICAEW) said on Thursday that its quarterly business confidence gauge was on track to return to positive territory for the first time since 2024 during the first quarter of 2026.
However, the index fell from +2.8 on the eve of the conflict to settle at -1.1 at the end of the 10-week survey, which closed on March 16.
“The first quarter was marked by two distinct phases for the British economy: the optimism at the start of the year was brutally dampened by the conflict in the Middle East, which revived fears of an explosion in cost pressures and a deterioration in the economy global economic situation,” said Suren Thiru, chief economist at ICAEW.
Here are the other key points from the investigation:
* Confidence fell for the fifth consecutive quarter, the longest series of declines in more than six years.
* Businesses worry about inflation, rising energy costs and supply chain disruptions due to the Iranian conflict.
* More than half of respondents say they are concerned about labor costs as the UK minimum wage rises, and 35% of businesses cite volatile energy prices as a source of concern.
* Forecasts for domestic and export sales for the next 12 months have fallen slightly, while expectations regarding the pace of increase in selling prices remain at historically high levels.
* 1,000 accountants took part in the ICAEW survey between January 12 and March 16. (Reporting by Suban Abdulla)
